Handforth leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Legislation has been in place for sometime now which permits qualifying Handforth residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Handforth you should check if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
Leasehold residencies in Handforth with in excess of 100 years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Yorkshire Building Society | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
Lease extensions in Handforth can be a difficult process. We recommend you get professional help from a conveyancer and surveyor with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Handforth lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In recent months Toby, came critically close to the eighty-year threshold with the lease on his two bedroom flat in Handforth. Having bought his home 18 years previously, the lease term was of no significance. Thankfully, he realised he needed to take action soon on Extending the lease. Toby extended the lease just ahead of time in July. Toby and the landlord eventually settled on the final figure of £5,500 . If the lease had slipped to less than 80 years, the amount would have become more exhorbitant by at least £1,050.
In 2014 we were approached by Mrs Louise Allen who, having acquired a garden apartment in Handforth in April 2000. The question was if we could shed any light on how much (roughly) premium could be for a 90 year extension to my lease. Similar homes in Handforth with 100 year plus lease were in the region of £189,000. The average amount of ground rent was £55 billed yearly. The lease finished in 2078. Given that there were 53 years unexpired we approximated the compensation to the landlord to extend the lease to be within £28,500 and £33,000 not including professional charges.
Ms E Simon completed a garden flat in Handforth in February 1997. The dilemma was if we could estimate the compensation to the landlord would likely be for a 90 year extension to my lease. Comparable flats in Handforth with 100 year plus lease were valued about £290,000. The mid-range ground rent payable was £45 billed annually. The lease termination date was on 4 February 2098. Taking into account 73 years as a residual term we estimated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of costs.